Bulgaria‘s government has revived a procedure that could give strategic status to a company behind an investment project to build a new gunpowder plant near Smyadovo, Shumen region. The proposal concerns Karash Invest, owned by Hristo Emilianov Gebrev, the son of arms manufacturer Emilian Gebrev, and Aheloy OPM.
The draft decree, submitted by the Ministry of Economy, Investments and Industry, proposes adding the two companies to the national list of strategic sites and activities important to national security. According to the stated reasoning, their production, trade and storage of defense-related products are considered important for civilian defense planning and national security.
The proposal does not itself authorize construction of the gunpowder plant. If adopted, however, the companies would fall under a special security regime, including increased monitoring, protection and control by the State Agency for National Security, as well as stricter requirements governing security and access.
The new procedure comes more than two years after an earlier attempt to give the same companies strategic status was blocked in 2024. At the time, the Ministry of Economy had submitted a draft decree proposing their inclusion in the strategic list, but the procedure was ultimately abandoned after the State Agency for National Security withdrew an initially positive opinion.
The episode later became the subject of political controversy. Former Economy Minister Bogdan Bogdanov said the government had been pressured to stop the procedure, while former Defense Minister Boyko Noev alleged that Delyan Peevski was behind the intervention. Bogdanov later told Radio Free Europe that the security agency withdrew its opinion following two phone calls to Peevski.
Peevski has not publicly confirmed these allegations, and the circumstances surrounding the withdrawal of the security agency’s opinion have not been established as fact by a final decision of a competent authority.
The issue received greater public attention in 2025 after Noev discussed it on Radio Free Europe’s Studio Bulgaria program. Bogdanov had previously referred to Peevski’s alleged intervention twice, first before a parliamentary committee in March 2024 and later in an interview with Nova TV in October that year.
The lack of strategic status for Karash Invest was significant because it meant the company did not receive the additional state protection associated with inclusion on the list. It also affected the confidence of external partners, according to the information cited in the supplied reports.
Karash Invest is associated with plans to expand gunpowder production capacity in the Smyadovo area. Bogdanov told a parliamentary committee in 2024 that the company had acquired an enterprise there and that procedures for reconstruction and expansion of its gunpowder production were already underway.
The project has gained additional importance amid the shortage of gunpowder and other ammunition components in Europe following Russia’s invasion of Ukraine in 2022. Gunpowder is essential for producing artillery ammunition, and expanding European production capacity has become a major defense-industry priority.
The revival of the project also comes days after explosions occurred at warehouses belonging to Gebrev‘s EMCO ammunition company near the village of Belitsa, close to Tryavna. The prosecutor’s office has opened a case into suspected arson and said all possible versions are being investigated, including the possibility of external interference.
The incident is not the first explosion involving Gebrev‘s businesses. In previous cases, Russian nationals linked to Russian military intelligence were charged. The same individuals have also been sought in connection with the attempted poisoning of Gebrev in 2015.
The government initiative is also unfolding alongside a separate major Bulgarian project to expand gunpowder and ammunition production. In October 2025, the Bulgarian state and German defense company Rheinmetall signed a strategic agreement to establish a joint venture between Rheinmetall and VMZ-Sopot.
That project, according to the supplied information, involves an investment of close to 1 billion euros and is expected to produce gunpowder, 155-mm artillery shells and modular charge systems. Around 1,000 jobs are expected to be created.
Bulgaria is therefore now considering two separate projects aimed at increasing domestic gunpowder production. One is the private initiative associated with Karash Invest and the Gebrev family, while the other is the state-backed venture with Rheinmetall.
For Karash Invest, the latest government proposal represents a second attempt to obtain strategic status. If the decree is approved, the company would once again be placed under the state’s strategic infrastructure regime, with additional security and control measures.
The move would not mean that the Smyadovo gunpowder plant has received a construction permit. It would instead formally recognize the company’s activities as having direct relevance to national security.
The renewed procedure comes as Bulgaria and other European countries seek to expand ammunition production and reduce reliance on external suppliers, giving the long-delayed project a different strategic context from when the original procedure was launched in 2024.
Background: The latest explosion at an EMCO ammunition facility has also revived scrutiny of the company’s history and a series of incidents involving its owner, Emilian Gebrev. Former Interior Ministry Secretary General Georgi Kandev said that, over the past decade, there had been four incidents involving the company, including an attempted murder case, and alleged that “sabotage groups in foreign service” had been involved. Kandev praised police and firefighters for their response to the Belitsa explosion and urged investigators to examine all possible explanations. “I hope that this time the investigators will get to the causes of the explosions more quickly, by checking absolutely all versions!” he wrote on Facebook.
Gebrev founded EMCO in 1992 after beginning his career at the state-owned arms company KINTEX. The company specializes in the trade and export of ammunition. His name later appeared in several international arms-related cases. In 2012, Russia reportedly placed him on a list sent to Bulgaria‘s Foreign Ministry, alleging that he had supplied weapons to Georgia and other conflict zones.
In April 2015, Gebrev, his son and an EMCO employee were hospitalized in Sofia after suffering severe poisoning from an unidentified substance. Bulgarian and international investigations later linked the case to operatives of Russia’s military intelligence service, the GRU. Gebrev has also previously said he believed Russian agents were behind an explosion at an ammunition warehouse in Karnobat, while his ammunition was also reportedly involved in the separate Czech Republic explosions case.
Gebrev‘s business activities have faced other controversies over the years. In 2001, U.S. customs authorities detained a ship carrying 30 million 7.62 mm rounds for AK-47 rifles that were destined for Nicaragua, although the cargo was subsequently released. In 2006, Bulgarian weapons were seized in Macedonia, including MG-3 machine guns and M-43 mortars. Documents indicated that the weapons were supposed to be destroyed but were instead sold for nearly USD200,000, significantly below market value. The deal was later canceled.
Another major dispute involved the Dunarit arms factory in Ruse. In 2016, the Competition Protection Commission temporarily halted Gebrev‘s attempt to acquire the company amid questions over its ownership structure. The offshore company Viafot Investment also claimed an interest in Dunarit and had previously been linked to former Corpbank owner Tsvetan Vassilev.
In 2017, EMCO temporarily lost its license after inspections identified violations concerning weapons and ammunition storage facilities. Some of the company’s KINTEX contracts were transferred to state-owned VMZ-Sopot, prompting protests by EMCO workers. Later that year, prosecutors charged Gebrev with money laundering in connection with the Dunarit acquisition and also launched proceedings involving an alleged organized crime group in which he was identified as the organizer.
In September 2017, EMCO was also reportedly placed on a U.S. State Department list restricting trade with American companies. The following month, the Bulgarian state and EMCO reached an agreement under which the company regained its KINTEX contracts.